Stellar (XLM) was one of the most talked about coins in early 2021. It skyrocketed between January 3^rd and 5^th of 2021 by more than 100%, from 0.16 to 0.35. It then continued to climb in prices between January and May, till it reached the price of $0.73 on May 11^th, the highest price it has reached since January 2018. Since then, however, XLM has been on a freefall, dropping all the way to $0.21 on July 19^th. It is now still hovering around $0.26, representing a 70% loss in market value between its present value and its market value at ATH. In this article, we will discuss whether XLM is still a stellar blockchain network and worthy of investment.

What is XLM?

XLM is the token for the blockchain protocol Stellar, which is an open network for storing and moving money. According to its official website, Stellar “makes it possible to create, send, and trade digital representations of all forms of money: dollars, pesos, bitcoin, pretty much anything. It’s designed so all the world’s financial systems can work together on a single network.”

Stellar is particularly useful for cross-border transactions, due to its capability of being able to trade and send or receive any two coin pairs. Thus, Stellar becomes a solid choice for remittances or cross-border payments, due to its uniqueness of low fees coupled with incredibly efficient transaction speed.

What Made XLM Surge in Prices?

One of the reasons why it surged in 2017, the growth period before the burst of the cryptocurrency bubble in 2018, was due to multiple partnerships with large corporations, such as IBM and Deloitte. Deloitte integrated with Stellar to build a cross-border payments application, Deloitte Digital Bank, and it was expanded later to include other mobile payments and transfer companies from India, France, and the Philippines. On the other hand, Stellar partnered with IBM to facilitate cross border transactions in the South Pacific region, and it led to XLM growing to 13^th in market cap among all cryptocurrencies.

Since the bubble burst, XLM had been hovering below the $0.2 price mark. However, an announcement in early January with the Ministry of Digital Transformation of Ukraine partnering with Stellar to develop Ukraine digital infrastructure, specifically digital finance systems, led Stellar to skyrocket more than 100%.

Why Had XLM Been Struggling?

However, XLM clearly couldn’t capitalize on the wild upswing between January and May of 2021. One of the reasons is due to the speculative nature of cryptocurrencies, and much of the volatility in favor of prices often rely on public attention and media coverage. Since May, the media coverage has been much quieter for XLM than before, partly due to the rise of memecoins like DOGE and SHIB. Another reason is because the hype for cryptocurrencies had been drawn away from the actual capability of the blockchain network itself, and were more focused on NFTs and the metaverse.

Furthermore, there has not been any major upgrades to the Stellar network in the later stages of 2021. Again, attracting headlines and grabbing attention from the public in a speculative investment environment seems to be the best way for prices to rise, with DOGE jumping more than 20% on a day just because Elon Musk announced that it would now accept DOGE as a payment method for Tesla’s merchandise.

Future of XLM and Investment Verdict

Since its low point in July, though XLM is not rising fast, it is still trending up in prices, indicating that there is still significant support from bullish investments. Furthermore, XLM is focused on a purpose unique from the other top 30 cryptocurrencies, which is how to make all things related to cross-border transactions as cheap and as efficient as possible. Once Stellar releases upgrades that can seamlessly integrate various functions of financial instruments from around the globe on a single network, which presumably would take a lot more R&D and upgrades to the protocol, we could see XLM being one of the most impactful blockchain networks in existence. Thus, I believe investors could buy into what XLM is promising in the long-term, but also throw caution to the wind, as any investment decisions would require thorough research.

XLM price chart YTD